In 2004, as home values were skyrocketing in Hawaii, cattle ranchers throughout the state began weighing the pros and cons of subdividing their grazing lands for real estate development. Despite the lure of quick profits, many ranchers wanted to keep their property intact and were reluctant to sell. Then a team of Stanford ecologists came up with an innovative idea: What if the ranchers could actually increase their cash flow - and hold onto their property - by planting koa trees, a large species of acacia found only in Hawaii. 

Prized for its golden-red hardwood, koa has played an important role in Hawaiian culture for centuries. But koa trees began disappearing in the 1700s when Europeans introduced livestock and logging to the islands. Today, only 10 percent of the original forests are intact. Planting new forests could be a win-win scenario that would allow ranchers to earn money while restoring damaged ecosystems, reasoned Stanford ecologist Gretchen Daily.

"Many Hawaiian plants and animals have already gone extinct," said Daily, a professor of biology and a senior fellow at the Woods Institute. "Those that remain are dependent on native forest, of which koa is a key species. If we can bring back koa, we can help secure the future of those native species that still survive."

In 2004, the Woods Institute awarded Daily and her colleagues a two-year Environmental Venture Projects (EVP) grant to test their idea in the field. The results so far have been dramatic. In a major study published in the Proceedings of the National Academy of Sciences (PNAS) in June 2006, the research team concluded that long-term reforestation of Hawaii's pastureland can be good for the environment and the pocketbook, offering landowners the potential of earning nearly nine times more income than they would from traditional cattle ranching. 

The PNAS study was conducted in the Kona region on the Big Island of Hawaii. Using computer models, the research team compared several financial strategies designed to make koa reforestation economically attractive to Kona's cattle ranchers, many of whom own several thousand acres of land. The study revealed that at 2006 prices, a rancher who did no reforestation would earn $194 per acre raising cattle. However, those who undertook reforestation could earn up to $1,661 per acre if they combined timber harvests with special conservation subsidies offered by the U.S. Department of Agriculture.

"Making conservation pay is a critical step toward encouraging restoration of private working lands," the researchers wrote in PNAS. "Finding economically viable means of reforesting degraded pastureland is relevant far beyond Hawaii, particularly in the tropics."

Indeed, the findings that have resulted from the EVP grant continue to inform major resource decisions in the state of Hawaii and are serving as a model for other areas of the world, Daily said. "Since the grant ended, we have presented to numerous government and corporate institutions and helped write two bills for conservation tax credits in Hawaii," she noted.

NATURAL CAPITAL PROJECT

The EVP grant also played a crucial role in laying the foundation for the Natural Capital Project, an unprecedented partnership of the Woods Institute, The Nature Conservancy, and the World Wildlife Fund. Launched in October 2006, the Natural Capital Project aspires to provide maps of nature's services (e.g., forests that purify water and air), assess their values in economic and other terms, and - for the first time on any significant scale - incorporate those values into resource decisions.

"We've been rapidly depleting and degrading our natural capital base, so that now the demand is higher than ever for natural capital that provides clean water, pollination of our crops, beauty, serenity, and all the other ecosystem services that people get from nature," said Daily, co-director of the Project. 

Natural Capital Project fieldwork is conducted in four locations: Tanzania, China, California, and Hawaii. The Woods EVP grant helped establish the Project's Hawaii Demonstration Site, Daily said. "Our goal," according to the Project website, "is a future in which Hawaii's unique ecosystems support the needs and aspirations of its communities: clean drinking water, productive farming and ranching lands, healthy coral reef and coastal systems, habitat for Hawaii's unique native plants and animals, forests sequestering carbon to mitigate climate change, and more."

INVESTING IN THE FUTURE

The Woods EVP study also played a key role in developing the Natural Capital Project's new online financial tool, InVEST, or Integrated Valuation of Ecosystem Services and Tradeoffs. InVEST gives policymakers around the world an easy-to-use program for calculating the economic value of the many services that people derive from ecosystems and incorporating those values into the planning process. 

"Partly as a result of the EVP and a series of concurrent, related efforts, the InVEST software system has been developed for mapping and valuing natural capital," Daly explained. "We're now testing and refining the software for major resource decisions in landscapes around the world—in China, Colombia, Ecuador, Tanzania, California, Hawaii, and Oregon. There is tremendous demand for this tool and approach to guide strategic investment in natural capital. The time is ripe in both the business and policy arenas."

To date, the findings of the Hawaii EVP research team have been presented at dozens of science and conservation meetings, served as the basis for three PhD theses at Stanford, and generated more than 20 peer-reviewed papers, including part of a special issue on ecosystem services published by the journal Frontiers in Ecology and the Environment in February 2009. The EVP grant also has allowed Daily and her co-workers to expand their working relationships with the Hawaii state government, the U.S. Forest Service, Kamehameha Schools and numerous private ranches in the state. 

"Conservation's becoming more complex than it was in the past, when you could go to a remote site, draw lines on a map, and call it protected," Daily said in a recent interview. "Our overarching goal is to make conservation economically attractive and common-place on land that is managed largely for human enterprise.